United States District Court, Northern District of Illinois, E.D
May 25, 1984
CONTINENTAL ILLINOIS NATIONAL BANK & TRUST COMPANY OF CHICAGO, PLAINTIFF AND COUNTERDEFENDANT,
JOHN R. STANLEY, DEFENDANT AND COUNTERPLAINTIFF.
The opinion of the court was delivered by: Bua, District Judge.
Before the Court is defendant Stanley's motion to transfer the
instant case pursuant to 28 U.S.C. § 1404(a). Stanley has moved
for transfer from the United States District Court for the
Northern District of Illinois, Eastern Division to the United
States District Court for the Eastern District of Louisiana.
Stanley argues that this transfer is proper because it would
provide a more convenient forum for the defendant and his
witnesses, and would better serve the interests of justice.
This suit was brought by Continental individually and as loan
agent for thirteen other banks against John R. Stanley to
recover on Stanley's personal guaranty in connection with loans
made by Continental and the other banks to four companies
controlled by Stanley.
The complaint alleges that Continental and the other banks
loaned the four companies, GHR Energy Corporation, GHR Pipeline
Corporation, GHR Transmission Corporation, and Southern
Petroleum Trading Company, Ltd., the principal amount of $750
million, and that pursuant to that loan agreement Stanley
guaranteed the payment of GHR's obligations. The complaint
further alleges that GHR is in default in its repayment of the
loans in the amount of
approximately $413 million. Accordingly, judgment is sought
against Stanley on his guaranty for the unpaid principal and
Stanley, in his answer, interposes as affirmative defenses lack
of consideration for the guaranty, duress in securing the
guaranty, misconduct of the banks in their performance under
the loan agreement, and failure of the banks to mitigate
damages. Additionally, Stanley has filed eight counterclaims
alleging violations by the banks of the Sherman Act, 15 U.S.C. § 1,
the Bank Holding Company Acts Amendments of 1970,
12 U.S.C. § 1972(1), and various state laws.
Defendant bases his motion on 28 U.S.C. § 1404(a) which
For the convenience of the parties and witnesses, in the
interest of justice, a district court may transfer any civil
action to any other district or division where it might have
In support of his motion defendant Stanley claims that venue is
proper in the Eastern District of Louisiana under
28 U.S.C. § 1391(a).*fn1 In his motion, Stanley claims that he resides
in Louisiana and that the claim arose in Louisiana, meeting two
of the possible three bases for venue.
Having met the prerequisite that the transferee forum be a
district where the case "might have been brought," Stanley
further claims that the convenience of the parties and
witnesses, and the interests of justice dictate the transfer.
The factors that this Court should weigh in resolving the
transfer issue include the private interests of the litigant,
relative ease of access to sources of proof, availability of
service of process on witnesses, cost of attendance of willing
witnesses, and other practical factors to make the trial easy,
expeditious and inexpensive. Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055.
The defendant claims that not only does he reside in Louisiana,
but all or almost all of the witnesses he intends to call, and
all his documentation necessary to defend this suit are in
Louisiana. In effect, Stanley claims that the burden on him
should he be required to try this case in the Northern District
of Illinois would be overwhelming.
In his motion Stanley minimizes the effect that this transfer
would have on Continental and the other banks. As the moving
party, Stanley has a strong burden of showing that another
forum is more appropriate. Magnavox Co. v. Bally Mfg. Corp.,
414 F. Supp. 891, 892 (N.D.Ill. 1976). It is not enough that
Stanley shows that he is inconvenienced by the forum if the
transfer would merely shift the expense and inconvenience to
the plaintiff. Magnavox v. APF Electroncis, Inc., 496 F. Supp. 29,
34 (N.D.Ill. 1980). It is apparent that Stanley has not met
this burden. In this case, a transfer of venue would merely
shift the burden and require the plaintiffs to transport their
witnesses and documentation to Louisiana.
When the plaintiff is a resident of the judicial district where
the litigation is brought, considerable deference is given to
the plaintiff's choice of forum. Bodine's, Inc. v. Sunny-O,
Inc., 494 F. Supp. 1279, 1285 (N.D.Ill. 1980).
Regardless of where the other banks participating in the loan
to GHR are located, Continental, as agent, has its principal
place of business in Illinois, convenient to this forum. It is
Continental which will call witnesses and present documentation
on behalf of all the banks, so it is Continental's convenience
which would be affected by a transfer, and whose convenience
should be considered, not the other banks. Defendant Stanley
has not shown that the plaintiff's choice of their residence as
the forum for this litigation is inappropriate, or that a
transfer to Louisiana would do other than shift the expense and
inconvenience to the plaintiff.
Stanley's claim that the interest of justice would best be
served by transferring this action to Louisiana because other,
related matters, might be transferred there, is speculative at
best. The other actions concerning the original obligors on the
loan agreement, currently pending in Massachusetts and
Louisiana, are under Chapter 11 of Title 11 of the United
States Code.*fn2 It is unlikely that this case would be
joined with the bankruptcy proceedings. See Hammond Corp. v.
General Electric Credit Corp., 374 F. Supp. 1356, 1359-60
This Court notes that the original obligors on the loan have
brought suit against Continental and several of the other banks
involved in the loan agreement. That suit is pending in the
Southern District of New York and involves a complaint
presenting claims almost identical to those in Stanley's
counterclaims in the present suit.
While Stanley argues that this forum would be an overly
burdensome one for him to proceed in, by suing in New York on
the identical issues as are involved in the counterclaims in
the instant suit, he apparently concedes that New York would be
a convenient forum in which to proceed. However, no reason is
given as to why New York would be convenient while this forum
would not be. Presumably, the same sources of proof, which
allegedly are present in Louisiana, would have to be brought to
both New York and Chicago to be produced in each individual
suit. Why Stanley could easily produce such evidence in New
York but would be overly burdened to produce it in this forum
escapes the Court.
Illinois is not only where Continental resides, but is also
where the loan originated, and where GHR defaulted on the loan
bringing the guaranty into operation. In addition, it is the
laws of Illinois which, by the agreement of the parties, govern
the interpretation guaranty.
For these reasons and the other factors stated above, this
Court finds that the defendant has not met his burden of
establishing that the transferee forum is more appropriate for
this action. Defendant's Motion to Transfer Venue is therefore
IT IS SO ORDERED.